By A.B. Ridgeway | The Ridgeway Report
Saving for a down payment—whether for a house, a car, or another major purchase—can feel overwhelming.
Most people ask:
- How much should I save each month?
- Will this actually be enough?
- What happens if I fall short when the time comes?
Today, I want to show you how we answer those questions before they become problems.
This is the same step-by-step process I use with clients to help them plan for large future expenses with clarity and confidence.
Start With the Facts
Every plan starts with facts, not guesses.
In this example, a client comes in and says:
- They need $65,000 for a home down payment
- They plan to buy in 4 years
- Based on their budget, they can save $1,200 per month
Now the question becomes simple—but critical:
Will this plan actually work?
The Assumptions That Matter
To answer that, we need a few realistic assumptions:
- Annual rate of return: 8%
- Compounding: Monthly
- Consistency: $1,200 saved every month without interruption
These assumptions allow us to test the plan before real money and real opportunities are on the line.
Running the Numbers
Because contributions are monthly, we convert everything properly:
- Time period:
4 years × 12 months = 48 periods - Monthly interest rate:
8% ÷ 12 = 0.6667% per month - Starting balance:
$0
After running the calculation, the result is:
$68,070.70
That means the client not only reaches their $65,000 goal—but exceeds it by about $3,000, which can be used for closing costs, moving expenses, or simply peace of mind.
Why Investing Matters
Now let’s compare that to saving the same $1,200 per month in a traditional savings account earning close to 0%.
Total contributions over 4 years:
- $1,200 × 48 = $57,600
That’s a shortfall of roughly $7,400.
In that scenario:
- The house goes on the market
- The down payment isn’t ready
- The opportunity is lost
Not because of effort—but because of planning.
Setting Proper Expectations
This is why planning matters.
If the math shows the plan won’t work:
- We adjust the savings amount
- We adjust the timeline
- Or we adjust expectations
What we don’t do is hope.
When clients know the numbers work, they stay committed—even during emergencies—because they understand that touching the savings changes the outcome.
Confidence comes from clarity.
This Framework Works for Any Goal
The same math applies if you’re saving for:
- A car
- A home
- A business expense
- Or any large future purchase
Once you know:
- How much you need
- How long you have
- And what you can realistically save
The plan becomes manageable—and achievable.
You Don’t Have to Do This Alone
If you’re trying to:
- Save for a down payment
- Plan for a large future expense
- Or simply want to know if your numbers make sense
A financial advisor can help you avoid costly mistakes before they happen.
Ready to Build a Plan That Actually Works?
If you’d like help running these numbers for your own situation—or need guidance with saving, investing, or rolling over a 401k—you can schedule a consultation using the link below.
👉 Schedule a consultation today.
My name is A.B. Ridgeway, and this has been another edition of The Ridgeway Report.
About the Author
A.B. Ridgeway, CPWA® is the founder of A.B. Ridgeway Wealth Management and host of The Ridgeway Report. He specializes in helping retirees and pre-retirees create reliable income, invest with clarity, and make confident financial decisions.
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About The Ridgeway Report:
As Christians, we were taught to be good stewards over our tithing and giving to the less fortunate. But when it came to our personal finances and investing we were left clueless on what the Bible says. What does the Bible say about managing debt, leaving a legacy, investing, and planning for your retirement? Mr. Christian Finance answers these and many other questions because we want to teach you how to become rich and righteous!
Meet A.B. Ridgeway:
A.B. Ridgeway, MBA, CPWA®️ (info@abrwealthmanagement.com) is the owner and Christian Financial Advisor with A.B. Ridgeway Wealth Management. With a decade in the finance industry, his goal is to give believers clarity around the most confusing topic in the Bible, money, and tithing. A.B. Ridgeway helps tithing Christians become cheerful givers but unlocking their money-making potential, so they can prosper and be the great stewards of the wealth God has entrusted them with.
*Disclaimer: This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy or the completeness of any description of securities, markets or developments mentioned. This is strictly for information purposes. We recommend you speak with a professional financial advisor.
*Some elements in this blog was created, restructured, edited or summarized by AI and may have altered from the original content. Warning: There may be errors that were creating during this transition that were not in the original content. Please double check all information.
